Yahoo Responds To Video Ad Fraud Allegations

Yahoo doesn’t have a fraudulent traffic problem, a company leader said Friday.

Tod Sacerdoti, VP of display and video ad products and the founder of Yahoo’s video ad exchange BrightRoll, was responding to a CNBC report late last week, which claimed widespread fraud in Yahoo’s ads business and sales “ineptitude” as responsible for the downfall of its video portal, Yahoo Screen.

“We’ve spent over the course of two to three years planning very sophisticated partnerships and work around the issues of fraud,” Sacerdoti told AdExchanger. “From our perspective, any number close to the numbers thrown out in that article are completely inaccurate.”

But some AdExchanger sources suggest Yahoo has been slow to integrate third-party measurement tags, at least through to completion.

And unnamed CNBC sources allege that “30 to 70%” of ads running through BrightRoll were not running in areas where Yahoo claimed they were, and that it charged $20 CPMs on pre-roll video despite delivering low-quality in-banner ads.

The report did not specify whether the supposed site placement issues stemmed from Yahoo owned-and-operated properties or publishing partners on BrightRoll’s video network, though Sacerdoti suspects CNBC’s sources were referring to the BrightRoll Exchange, if true.

Within the $10 billion video advertising business are numerous practices that can be potentially framed as fraudulent. These include obfuscating placement type (e.g., representing media as in-stream when it's really in-banner), concealing ad placements in nonviewable ad slots and enabling nonhuman traffic.

CNBC's report addressed primarily the first of those practices, but also referenced the nonhuman traffic issue.

According to third-party measurement company DoubleVerify, more than half of video ads being bought programmatically today are being served in-banner.

Moreover, according to DoubleVerify CEO Wayne Gattinella, "More than half of those in-banner ads are served on very inferior, low-impact player sizes."

This practice, however, adds confusion to the supply chain and lowers inventory quality.

Industrywide Issue?

Gattinella added that fraudulent and nonhuman impressions can characterize as much as 30% of video inventory today, but noted the problem is not Yahoo-specific.

“We’re well below the industry threshold for discrepancies,” Sacerdoti claimed. “From our perspective, it’s immaterial and not something we’d even expect to have a makegood conversation about.”

Even though BrightRoll’s marketplace may have been, in theory, more at risk for issues of traffic quality than its private exchange business, the big thing to remember is that there are no one-size-fits-all parameters for video because of the contextual complexities.

Sure, there are extra parameters for controls, but depending on the extent of programmatic retargeting and audience extension, even big-brand publishers cutting direct deals can run into these issues of fraudulent traffic, despite the appearance of a safety net in a private environment.

“I think it’s important to note that it’s not BrightRoll setting the price of the inventory,” commented one source who asked to remain anonymous because of their knowledge of Yahoo.”This is driven by marketplace dynamics, and anybody who’s got fraud in the double digits is way out of whack, and, from what I’ve seen, BrightRoll is in the same range as everybody else.”

One former exec at Yahoo said there was a point last summer when “nefarious” traffic hit the double digits, but that was highly unusual and it was a situation where “no one left the building until it gets figured out.” The source did not elaborate on the causes of those unusually high percentages plaguing BrightRoll at that juncture.

Sacerdoti claimed BrightRoll does pre-bid filtering for fraudulent and nonhuman traffic today, meaning it “pre-cleans” supply before a DSP even bids in an auction.

Then last summer, Yahoo took additional steps to integrate third-party tags from Moat, DoubleVerify, Integral Ad Science and comScore to track impressions on its owned-and-operated sites and network extensions.

Some partners, however, have questions around the status of integration with Yahoo products.

“To be candid, we have integrated several of our data quality measurers with Yahoo properties, but the BrightRoll integration, to our knowledge, was never fully implemented,” Gattinella said. “After the merger announcement, there was a lot of change going on in the organization, and at this point, we’re not exactly sure what they’ve implemented at BrightRoll. We don’t believe our data today is fully being utilized in their programmatic decisioning.”

CNBC sources also alleged that a high volume of Yahoo traffic stems from data centers. Data centers typically represent less than 3% of traffic in a well-managed network, said Gattinella, and a higher percentage is symptomatic of a more widespread epidemic.

Although not speaking specifically to Yahoo, he noted there can be anomalies.

For instance, a lot of corporate IP traffic derives from a single server, so while traffic might look like it comes from a single data center, it in fact comes from a lot of individuals who work for the same company.

Commitments And Culture

CNBC sources also said Yahoo’s ad sales team dropped the ball with the (soon-to-be-defunct) video portal Yahoo Screen – specifically that Yahoo lost “hundreds of ad partners” because it didn’t articulate content and ad product availability.

“I don’t run the agency sales business, but I would assure you that if we had customers with 30-70% fraud or paying $20 CPMs and running inventory that costs $2, that’d be [something that comes up] in sales discussions and it hasn’t,” Sacerdoti retorted. “Frankly, that information feels out of date, unfounded or inaccurate.”

Here’s the thing: Some advertisers expressed displeasure with Yahoo programs, but it was more about Yahoo not being able to disclose how many people watched its O&O content than anything BrightRoll-specific, said one AdExchanger source with direct knowledge of the company.

“To me, that’s not a fraud issue,” that source added. “That’s more of a delivery issue, where they might say they can deliver a million viewers, but only delivered 750,000.”

Yahoo’s attempt at a turnaround will be bigger than BrightRoll. It will need to demonstrate it can sustain audience growth and engagement.

Although BrightRoll was central to uniting various ad tech assets – such as the Yahoo Ad Exchange (formerly Right Media Exchange) – Yahoo has bigger fish to fry as the company reportedly prepares to lay off 10% of its workforce and contends with scalding criticism from irate investors on an almost daily basis

“Yahoo, as an organization, has been challenged given the number of acquisitions and the time it has taken them to weave those pieces into their offering,” noted Sarah Baehr, EVP and managing director of digital at Carat. “The expectation (right or wrong) is that it all the pieces should be integrated by now.”

So is there light at the end of the tunnel for Yahoo’s ads business?

Beyond the status of its tech integrations and the even bigger question mark around its parent brand, Baehr noted some O&O properties like Yahoo Finance and Sports still command audience and remain viable opportunities for buyers.

“Yahoo still has a highly valuable audience today,” added Tom Triscari, CEO of programmatic consultancy Labmatik and a former Yahoo employee who led a large display team there from 2008-2012. “Yahoo would never do anything malicious, so if the story is true, then it's likely something management missed given all the uncertainty around the business, which is more of an internal control problem than anything else.”

3 Comments

Of course Yahoo is going to defend the claim, but they are flat out wrong. We are another company who has seen 30%-70% of click fraud. It is was not so blatant, we probably wouldn't have noticed. We have noticed this for the past 2-3 months. Shame on Yahoo for misleading and stealing our money.

Tod Sacerdoti and the BrightRoll team have always been at the forefront of fighting fraud and working to ensure that their position in the video space is one about quality and servicing both their advertisers and publishers to the highest degree.

Back in 2010, before fraud became such a reality in the space, Tod and the BrightRoll team were the first video platform to seek 3rd party guidance to help them lead the way in terms of quality video supply. With as much money that was pouring into the video space at the time, it would have been very easy to take the money and run. Tod chose to take a different approach working with what is now Google's Adometry, previously Click Forensics's, traffic quality technology to ensure that BrightRoll was a leader in terms of traffic quality for their advertisers.

Given the history of BrightRoll and Tod's reputation, there's a lot more to this story than what's being reported and his reputation for fighting fraud, when others were turning a blind eye, should be weighted heavily.